NEW YORK (Feb 26): The narcissism and Panglossian cluelessness of the Wall Street elite is a marvel to behold. Sitting on their perches of power, and enjoying tax breaks, easy money, and soaring stock markets, they are certain that all is best in this best of all possible worlds. Critics must be fools or devils.
When I have mentioned my support for US presidential candidate Bernie Sanders in their company, it has been to audible gasps, as if I had invoked Lucifer’s name. They are certain that Sanders is unelectable, or that, if somehow elected, he would bring about the collapse of the republic. To varying degrees, the same sentiments can be found even in “liberal” media outlets like The New York Times and The Washington Post.
This disdain is both telling and absurd. In Europe, Sanders would be a mainstream social democrat. He wants to restore some basic decency to American life: universal publicly financed health care; above-poverty wages for full-time workers, along with basic benefits such as family leave for infants and paid leave for illness; college education that does not drive young adults into lifelong debt; elections that billionaires cannot buy; and public policy determined by public opinion, not corporate lobbying (which reached US$3.47 billion in the United States in 2019).
The US public supports all these positions by large majorities. Americans want government to ensure health care for all. They want higher taxes on the rich. They want a transition to renewable energy. And they want limits on big money in politics. These are all core Sanders positions, and all are commonplace in Europe. Nonetheless, with each Sanders primary victory, the befuddled Wall Street elite and their favorite pundits puzzle over how an “extremist” like Sanders wins the vote.
An insight into Wall Street’s cluelessness is found in a recent Financial Times interview with Lloyd Blankfein, the former CEO of Goldman Sachs. Blankfein, a billionaire who earned tens of millions of dollars each year, argued that he’s merely “well-to-do,” not rich. More bizarrely, he meant it. You see, Blankfein is a low-single-digit billionaire in an era when more than 50 Americans have a net worth of US$10 billion or more. How rich one feels depends on one’s peer group.
The result, however, is the elite’s (and the elite media’s) shocking disregard for the lives of most Americans. They either don’t know or don’t care that tens of millions of Americans lack basic health-care coverage and that medical expenses bankrupt around 500,000 each year, or that one in five US households has zero or negative net worth and that nearly 40% struggle to meet basic needs.
And the elite hardly take notice of the 44 million Americans burdened by student debt totaling US$1.6 trillion, a phenomenon essentially unknown in other developed countries. And while stock markets have soared, enriching the elites, suicide rates and other “deaths of despair” (such as opioid overdoses) have also soared, as the working class has fallen further into financial and psychological insecurity.
One reason the elites don’t notice these basic facts is that they haven’t been held to account for a long time. US politicians of both parties have been doing their bidding at least since President Ronald Reagan took office in 1981 and ushered in four decades of tax cuts, union busting, and other perks for the super-rich. The coziness of Wall Street and Washington is well captured in a 2008 photo making the rounds again: Donald Trump, Michael Bloomberg, and Bill Clinton are golfing together. It’s one big happy family.
Clinton’s chumminess with Wall Street billionaires is telling. This was the norm for Republicans going back to the start of the twentieth century, but Wall Street’s close links with the Democrats are more recent. As a presidential candidate in 1992, Clinton maneuvered to link the Democratic Party to Goldman Sachs through its then-Co-Chair, Robert Rubin, who later became Clinton’s Secretary of the Treasury.
With Wall Street backing, Clinton won the presidency. From then on, both parties have been beholden to Wall Street for campaign financing. Barack Obama followed the Clinton playbook in the 2008 election. Once in office, Obama hired Rubin’s acolytes to staff his economic team.
Wall Street has certainly gotten its money’s worth for its campaign outlays. Clinton deregulated financial markets, enabling the rise of behemoths like Citigroup (where Rubin became a director after leaving the White House). Clinton also ended welfare payments for poor single mothers, with damaging effects on young children, and stepped up mass incarceration of young African-American men. Obama, for his part, largely gave a free pass to the bankers who caused the 2008 crash. They received bailout money and invitations to White House dinners, rather than the jail time that many deserved.
With the mega-hubris of a mega-billionaire, former New York City Mayor Michael Bloomberg thinks he can buy the Democratic nomination by spending US$1 billion of his $62 billion fortune on campaign ads, and then defeat fellow billionaire Donald Trump in November. This, too, is most likely a case of cluelessness. Bloomberg’s prospects deflated as soon as he appeared on the debate stage with Sanders and the other Democratic candidates, who reminded viewers of Bloomberg’s Republican past, allegations of a hostile work environment for women in Bloomberg’s business, and of his support for harsh police tactics against young African-American and Latino men.
No one should underestimate the deluge of hysteria that Trump and Wall Street will try to whip up against Sanders. Trump accuses Sanders of trying to turn the US into Venezuela, when Canada or Denmark are the obvious comparisons. In the Nevada debate, Bloomberg ludicrously called Sanders’s support for worker representation on corporate boards, as in Germany’s co-determination policy, “communist.”
But American voters are hearing something different: health care, education, decent wages, paid sick leave, renewable energy, and an end to tax breaks and impunity for the super-rich. It all sounds eminently sensible, indeed mainstream, when one cuts through the rhetoric of Wall Street, which is why Sanders has been winning – and can win again in November.
Jeffrey D. Sachs, Professor of Sustainable Development and Professor of Health Policy and Management at Columbia University, is Director of Columbia’s Center for Sustainable Development and the UN Sustainable Development Solutions Network.
Copyright: Project Syndicate, 2020.